Is it normal where you are (MA = Massachussetts?) to send people solo XC with only "3 or 4" solo flights under their belts? In NZ we don't even take them out of the training area until they have about 30 hours total, by which time they have about ten solo flights.
Maybe the student is being a little on the "too cautious" side of things and a discussion on aceptable risk is appropriate.
eg. "If we wanted to be perfectly safe we wouldn't even get out of bed, and certainly wouldn't drive to an airport, but when we got there we would know we were in safe hands.
The engineers, ATC, and us, your instructors, all have your best interests at heart and we desperately want you to be OK when you fly, and for nothing unusual to happen. Considering this, and your abilities as a pilot, I am happy to let you go and find XXXXXXX (and name a point just outside the normal training area, maybe another 5nm away). Count the number of houses with red roofs (rooves?) and come back and tell me how many there are.
Oh, and do the nav log while you are on the way there and back, hold your heading and you'll find it works quite well. Then we'll have a chat and see what you want to do for the next one."
I personally agree with showing him that he can do the navigation, he already has been, and that you are quite happy sending him off in your aircraft (a white lie doesn't hurt now and again). What I would probably do is talk to my boss first and say this is the situation, this is what I think I should say, any comments.
What you may have to do is identify exactly what it is he is scared of. It sounds like it may come down to 'I don't know if I can cope if...', in which case the solution presents itself. I remember being absolutely terrified of low flying (below 400') to the point where I couldn't even read the ASI. I knew I was scared but couldn't do anything about it until my instructor took over, asked me what I was scared of and I said if the engine stops that's all our power gone. So what? she said, what would you do then. I pointed to a huge paddock and said I'd land there. Would we make it from here, she asked and I said I don't know, so she demo'd an engine failure and down we went and she said well the plane will, do you think you can. I dunno! I said, I can't even fly this low let alone lower. So she took me back to the exact same spot and pulled the power and I flew it down to about 100' (that was the old days) and she said well there we are then aren't we. Thanks Paula.
Anyway the point is if you show him it can be done, he either has to stop flying (which doesn't sound likely) or you have convinced him that he can do it. So be nice but firm, and tell him to do the navigation and the place will appear in front of him, he can fill in the nav log, have a look at the place and confirm it is where he thinks it is, then come back navigating the same way and that's it. You don't want him to get place-specific skills though, because they're not actually skills just recognising places. The skill is time-speed-distance and holding the heading, and once that is in place then everywhere is flyable.
That's my two cents worth anyway.
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Confident, cocky, lazy, dead.